NEW DELHI: The cashstrapped railways will end up saving Rs 10,000 crore annually if the railwayboard stops all centralized procurement, says a report by 'Metro man' E Sreedharan.

In his final report on 'delegating tendering and commercial powers to general managers and otheroperating levels' of railways, Sreedharan has pointed out that by centralizing procurement powers, therailway board has accumulated enormous sum of money in the hands of few, and hugely enhancedrentseeking power that encourages corruption.

The committee heard views of senior officials. "Procurement is through cartel only, list of approvedsources and cartels are synonymous ... there is no item in which there is no cartel .. Committee feelsthat vendors thus continue to fleece at will," Sreedharan says.

READ ALSO: Let private players run trains, says Debroy panel

Book your train tickets 4 months in advance

Couching the scale of the scandal and losses in an understated tone, the report says: "The committee after scrutinizing current practices andprocedures followed at the board concludes that improving and decentralizing the system with empowerment and accountability shall effect annualeconomy to the tune of rupees five thousand crore in stores procurement and equal amount in works contracts."

The committee's final report, submitted on March 15, has recommended that the board should not take any commercial decision, and evenprocurement for its own needs should be done by the northern railway. It has called for decentralization of all those powers to general managers andlower levels.

Railways is the second biggest procurement agency after defence, spending almost Rs 1 lakh crore a year and the railway board procures almost half ofit.

Sreedharan had submitted his interim report in November last year, and the ministry initiated some decentralization steps based on it.

In the final report, the Metro man says the board was set up originally to "make policies, plans, to lay broader principles of railway management, toframe rules, to inspect and guide the railways". "And today the board is not performing these roles," he says.

For detailed analysis, the committee took up a few procurement items like diesel, concrete sleepers, 53S grade cement and rails and concluded that therailways could end up saving a staggering Rs 10,000 crore annually if decentralization is undertaken.

In case of diesel, of which railways is the largest buyer in India, the new tender has not been finalized for the last 15 months. In case of 'weldableCMS'and 'thick web switches', contracts have not been finalized for a decade, the report says.

The report has also says that RDSO (Research Design and Standards Organisation) — the research arm of the railways — is dealing with vendors,technical evaluation of railway board tenders etc. "This committee believes that the above roles being morphed into one organization have seriousconflicts with grave consequences for Indian Railways, emergence of extremely high rentseeking behaviour and cartelization amongst vendors andcollusion with officials that finally fleeces railways and eats into its body fabric like termite," the report says.

"Innovation and experimentation take a big hit and lack of transparency and lack of accountability become the predominant trait," it says of thecentralization of powers with the board. The observations come against the backdrop of several allegations against railway board members, and arrestof one of them in recent times.

"Indian Railways today is at a cross road. It has reached such a stage of centralization, nontransparency, inordinate delay and nonaccountability incommercial and other decisionmaking that an incremental and evolutionary solution will not suffice. Instead, there is a need to shake the system outof its cultural status and to enthuse a new ethos to reorient it to the path of sound and fast effective businessoriented decisiontaking," the report says.

Sreedharan says the board "does not trust the business instinct, capacity and capability of its general managers, who are the highest railway authorityin the field".

In his interim report, Sreedharan had recommended that the general managers should have full powers with regard to works, stores procurement,services and commercial tenders among other things.

Sreedharan points out that the railways need to urgently reverse the trend of fast losing its traffic to road and air. Its freight share is down from 82% in196061 to 30% in terms of tonnage and of passengers to 12%. In the next five years, it has to mobilize Rs 8.5 lakh crore, he points out.

Josy Joseph,TNN | Apr 2, 2015, 01.08 AM IST

Printed from

Cartels in procurement loot railways of Rs 10,000 crore a year: ESreedharan

Sreedharan has pointed out that by centralizing

procurement powers, the railway board has

accumulated enormous sum of money in the hands

of few, and hugely enhanced rentseeking power

that encourages corruption. 

http://http//timesofindia.indiatimes.com/india/From-April-1-book-your-train-tickets-4-months-in-advance/articleshow/46597884.cmshttp://timesofindia.indiatimes.com/toireporter/author-Josy-Joseph.cmshttp://timesofindia.indiatimes.com/http://timesofindia.indiatimes.com/india/Let-private-players-run-trains-says-Debroy-panel/articleshow/46763816.cms

Post a comment

"Perhaps no Indian institution has been subjected to review by more committees than the railways, but the irony is, most reports gather dust with theirrecommendations unimplemented," Sreedharan says.

Read in Hindi: रलेव ेको हर साल लग रहा 10 हजार करोड़ का चनूाः 嘁롋रपोट��

Stay updated on the go with Times of India News App. Click here to download it for your device.

FROM AROUND THE WEB

MORE FROM THE TIMES OF INDIA

Recommended by

Promoted StoriesA short history of cloud computing Intel

Unique Method May Regrow Lost Hair Lifestyle Journal

5 Indian Tech Companies You Need to Know OZY

Ship Carrying $53 Million In Rolls Royce Cars Sinks My 1st ClassLife

12 States You Will Want To Retire And Settle Down In TheInvestment Doctor

You Won't Recognize These 10 Celebs Without MakeupLook.Damn.Good.

More from The Times of IndiaGhulam Ali to perform at Hanuman temple in Varanasi 02 Apr 2015

`I respect Resul sir, but have sent him a legal notice' 27 Mar 2015

US offers groundbreaking defence technologies to India  TheTimes of India 12 Mar 2015

ModiJagan meeting fuels speculation 31 Mar 2015

At 40.8°C, Mumbai feels the discomfort on second hottest Marchday in a… 26 Mar 2015

Giriraj Singh likens Rahul Gandhi to missing Malaysian plane 02Apr 2015

Recommended by

Bankers Healthcare Groupemployees get a gym, personaltrainer and "chillout" roomsSun Sentinel  Business

The Most Powerful Man In India YouHaven’t Heard OfOZY

5 Charts Showing That The NextEconomic Crash Is Dead AheadTalkMarkets

Vizag's mysterious black holeMar 29, 2015

Rajniesh Duggall goes all out andbrazenly bold with Sunny LeoneMar 19, 2015

Amid stalled fighter projects,upgraded Mirage cheers IAFMar 23, 2015

http://timesofindia.indiatimes.com/india/Giriraj-Singh-likens-Rahul-Gandhi-to-missing-Malaysian-plane/articleshow/46777560.cms?intenttarget=nohttp://timesofindia.indiatimes.com/entertainment/hindi/bollywood/news/I-respect-Resul-sir-but-have-sent-him-a-legal-notice/articleshow/46711567.cms?intenttarget=nohttp://timesofindia.indiatimes.com/india/Amid-stalled-fighter-projects-upgraded-Mirage-cheers-IAF/articleshow/46657297.cms?intenttarget=nohttp://lifestylejournal.com/hairlossprotocol/?aff=1233&sub=HLP-ROW-Desk&ad_id=34271024http://ad.doubleclick.net/ddm/clk/289427404;116274292;jhttp://timesofindia.indiatimes.com/city/varanasi/Ghulam-Ali-live-from-Hanuman-durbar-from-April-8/articleshow/46776831.cms?intenttarget=nohttp://timesofindia.indiatimes.com/india/Modi-Jagan-meeting-fuels-speculation/articleshow/46751137.cms?intenttarget=nohttp://timesofindia.indiatimes.com/home/science/Vizags-mysterious-black-hole/articleshow/46731793.cms?intenttarget=nohttp://www.sun-sentinel.com/business/careers/fl-bankers-healthcare-group-20150312-story.htmlhttp://myfirstclasslife.com/overboard-53-million-luxury-cars-destroyed/http://www.theinvestmentdr.com/the-12-best-states-to-grow-old-in/54/693/http://timesofindia.indiatimes.com/entertainment/hindi/bollywood/news/Rajniesh-Duggall-goes-all-out-and-brazenly-bold-with-Sunny-Leone/articleshow/46619400.cms?intenttarget=nohttp://www.talkmarkets.com/content/us-markets/5-charts-showing-that-the-next-economic-crash-is-dead-ahead?post=61887http://timesofindia.indiatimes.com/india/US-offers-groundbreaking-defence-technologies-to-India/movie-review/36527493.cms?intenttarget=nohttp://timesofindia.indiatimes.com/city/mumbai/At-40-8C-Mumbai-feels-the-discomfort-on-second-hottest-March-day-in-a-decade/articleshow/46696180.cms?intenttarget=nohttp://www.ozy.com/rising-stars-and-provocateurs/arun-jaitley-turning-indias-economy-back-to-growth/32703?utm_source=Outbrain&utm_medium=CPC&utm_campaign=INTL%20-%20All%20Clicks%20ALL%20Deviceshttp://timesofindia.indiatimes.com/mobileapplist/7404562.cms?utm_source=articleshow_bottom&utm_medium=showpage&utm_campaign=articleshowhttp://http//navbharattimes.indiatimes.com/india/cartels-in-procurement-loot-railways-of-rs-10000-crore-a-year-e-sreedharan/articleshow/46777912.cmshttp://lookdamngood.com/10-celebs-without-makeup/http://www.ozy.com/acumen/5-indian-tech-companies-you-need-to-know/33059?utm_source=Outbrain&utm_medium=CPC&utm_campaign=All%20-%20Content%20-%20All%20Devices%20-%20India%20Only

Subscribe to Top News NewsletterGet updates on the most important happening of the day

THE TIMES OF INDIAPowered by INDIATIMES

About us Advertise with us Terms of Use and Grievance Redressal PolicyPrivacy policy Feedback RSSNewsletter TOI Mobile ePaperSitemap Archives

Other Times Group news sitesThe Economic Timesइकनॉिमक टाइ頄स | ઈકોનોિમક ટાઈ䛿fiસPune Mirror | Bangalore MirrorAhmedabad Mirror | ItsMyAscentEducation Times | Brand CapitalMumbai Mirror | Times NowIndiatimes | नवभारत टाइ頄समहारा찄 टाइ頄स | 퇿씀ಜಯ ಕ븂봂ಾ倀䀀ಟಕGo Green | NavGujarat Samay

Living and entertainmentTimescity | iDiva | Entertainment | ZoomHealthmeup | Luxpresso | Gadget ReviewsGuylife | Online Songs

Interest Networkitimes | Email

Hot on the WebWorld | PoliticsBusiness | SportsEntertainmentScience & TechNew CarsBudget 2015

ServicesBook print ads | Online shopping | Free SMS | Website design | CRM | TendersMatrimonial | Ringtones | Astrology | Jobs | Tech Community | Property | Buy carBikes in India | Deals | Free Classifieds | Send money to India | Used CarsRestaurants in Delhi | Movie Show Timings in Mumbai | Remit to India | Buy MobilesListen Songs | News | Real Estate Developers

Trending TopicsTata Bolt Price | Photogallery | You Tube | Delhi Travel Guide | Katrina Kaif Photos |Best Android Phones | Hindi Songs | Horoscope 2015 Predictions | iPhone 6 Price |Facebook | Sunny Leone Photos | Hindi News

Copyright © 2014 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service

Enter your Email Subscribe

http://timesofindia.indiatimes.com/sitemap.cmshttp://tenders.indiatimes.com/http://idiva.com/index.php?host=TOIhttp://luxpresso.com/http://mocolife.com/http://www.itsmyascent.com/http://www.mensxp.com/gallery.htmlhttp://mobile.indiatimes.com/pmswapdev_in/pmsdata.html?target=tilweb/til/ringtoneindex.html&top=1&SM_PAGENUM=1&s=0&cn=&sec=ring&cat=browseallhttp://navgujaratsamay.indiatimes.com/http://gogreenindia.co.in/http://timescontent.com/http://gaana.com/newreleasehttp://timesofindia.indiatimes.com/topic/home/businesshttp://photogallery.indiatimes.com/topic/Sunny-Leonehttp://maharashtratimes.indiatimes.com/http://advertise.indiatimes.com/http://www.salescrm.indiatimes.com/http://www.myeducationtimes.com/educationTimes/index.jsphttp://www.webuild.indiatimes.com/http://economictimes.indiatimes.com/http://www.timesnow.tv/http://www.punemirror.in/http://timesofindia.indiatimes.com/topic/home/worldhttp://timesofindia.indiatimes.com/budgetspecial.cmshttp://www.zoomtv.in/http://navbharattimes.indiatimes.com/http://timesofindia.indiatimes.com/topic/Facebookhttp://hindi.economictimes.indiatimes.com/http://timesofindia.indiatimes.com/archive.cmshttp://m.timesofindia.com/http://www.zigwheels.com/http://gaana.com/newrelease/hindihttp://www.indiatimes.com/http://www.astrospeak.com/http://www.mumbaimirror.com/http://shopping.indiatimes.com/mobiles/http://www.happytrips.com/delhi/travel-guide/cs23956884.cmshttp://timesofindia.indiatimes.com/newslettersubscription.cmshttp://www.astrospeak.com/horoscope-predictionshttp://timesofindia.indiatimes.com/tech/special/apple-unveils-iphone-6-6-plus-apple-watch/tech_special/39480160.cmshttp://www.indiatimes.com/termsandconditionhttp://property.magicbricks.com/http://timesdeal.com/http://timesofindia.indiatimes.com/entertainmenthttp://timesofindia.indiatimes.com/topic/home/sportshttp://www.magicbricks.com/http://www.simplymarry.com/http://www.zigwheels.com/used-carhttp://www.bangaloremirror.com/http://gujarati.economictimes.indiatimes.com/http://www.indiatimes.com/privacypolicyhttp://brandcapital.co.in/http://timesofindia.indiatimes.com/feedback.cmshttp://www.zigwheels.com/newcars/Tata/Bolthttp://www.ahmedabadmirror.com/http://timesofindia.indiatimes.com/tech/reviewshttp://www.techgig.com/http://www.timescity.com/http://navbharattimes.indiatimes.com/http://timesofindia.indiatimes.com/tech/slideshow/6-best-android-smartphones-under-rs-7000/itslideshowviewall/44960645.cmshttp://www.yolist.com/http://timesofindia.indiatimes.com/http://www.timesjobs.com/http://shopping.indiatimes.com/http://timescity.com/delhi/restaurantshttp://email.indiatimes.com/http://epaper.timesofindia.com/http://guylife.com/http://timesofindia.indiatimes.com/topic/YouTubehttp://gaana.com/http://timesofindia.indiatimes.com/zigwheels.cmshttp://ww.itimes.com/http://vijaykarnataka.indiatimes.com/http://timesofindia.indiatimes.com/topic/home/entertainmenthttp://timesofindia.indiatimes.com/topic/home/scitechhttp://timescity.com/mumbai/movieshttp://www.timesinternet.in/http://www.timesofmoney.com/remittance/jsp/home.jsphttp://timesofindia.indiatimes.com/topic/home/politicshttp://timesofindia.indiatimes.com/rss.cmshttp://healthmeup.com/http://www.zigwheels.com/bikeshttp://timesofindia.indiatimes.com/business/india-business/Send-Money-to-India-the-safe-convenient-inexpensive-way/articleshow/11079712.cmshttp://www.ads2book.com/http://ww.itimes.com/album/katrina-kaifs-hot-photos